Russia Central Bank Lowers Rate Again; Signals More Easing

Trading 25 oct 2019 Commentaire »

Russia central bank on Friday cut its key interest rate for the fourth straight session amid persistently slowing inflation and subdued growth and signaled that it is will consider further easing in future. The Board of Directors, led by Governor Elvira Nabiullina, decided to cut the key rate by 50 basis points to 6.5 percent, the Bank of Russia said in a statement. Economists had forecast a reduction to 6.75 percent.

The previous reduction in the rate was a 25 basis points cut in September.

Inflation expectations continue to decrease and economic growth rate still remains subdued, the bank said. The slowdown in inflation is over shooting the forecast, the central bank added.

"Risks of?a?substantial global economic slowdown persist," the central bank said. "Disinflationary risks exceed pro-inflationary risks over the short-term horizon."

Citing these circumstances, the bank lowered the annual inflation forecast for this year to 3.2-3.7 percent from 4-4.5 percent. The bank expects inflation of 3.5-4 percent next year and around 4 percent thereafter.

The GDP growth forecast for this year was left unchanged at 0.8-1.3 percent. However, current data suggest that growth of the Russian economy might accelerate in the third quarter. The bank forecast 2-3 percent growth in 2022. "If?the situation develops in?line with the baseline forecast, the Bank of?Russia will consider the necessity of?further key rate reduction at?one of?the upcoming Board of?Directors' meetings," the bank said.


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U.S. Consumer Sentiment Improves Slightly Less Than Initially Estimated

Trading 25 oct 2019 Commentaire »

Revised data released by the University of Michigan on Friday showed U.S. consumer sentiment improved by slightly less than initially estimated in the month of October.

The report said the consumer sentiment index for October was downwardly revised to 95.5 from the preliminary reading of 96.0. Economists had expected the index to be unrevised.

Despite the downward revision, the consumer sentiment index for October was still up from the final September reading of 93.2.

"Sentiment was insignificantly below the mid month level, with the small loss spread over most components of the Index," said Surveys of Consumers chief economist Richard Curtin.

He added, "The overall level of consumer confidence has remained quite favorable and largely unchanged during the past few years."

The report said the current economic conditions index rose to 113.2 in October from 108.5 in September, while the index of consumer expectations inched up to 84.2 from 83.4.

With regard to inflation, one-year inflation expectations tumbled to 2.5 percent in October from 2.8 percent in September, while five-year inflation expectations dipped to 2.3 percent from 2.4 percent.


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Dollar Little Changed After U.S. Consumer Sentiment Index

Trading 25 oct 2019 Commentaire »

Following the release of the University of Michigan's consumer sentiment index for October at 10:00 am ET Friday, the greenback changed little against its major counterparts.

The greenback was trading at 1.2817 against the pound, 1.1094 against the euro, 108.60 against the yen and 0.9931 against the franc around 10:02 am ET.


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*U.S. Consumer Sentiment Index Downwardly Revised To 95.5 In October

Trading 25 oct 2019 Commentaire »

U.S. Consumer Sentiment Index Downwardly Revised To 95.5 In October


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Dollar Mixed Ahead Of U.S. Consumer Sentiment Index

Trading 25 oct 2019 Commentaire »

The University of Michigan's consumer sentiment index for October is scheduled for release at 10:00 am ET Friday. Ahead of the data, the greenback traded mixed against its major counterparts. While the greenback held steady against the yen, it rose against the rest of major counterparts.

The greenback was worth 1.2810 against the pound, 1.1089 against the euro, 108.63 against the yen and 0.9931 against the franc at 9:55 am ET.


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Forecasters Cut Euro Area Growth, Inflation Expectations: ECB Survey

Trading 25 oct 2019 Commentaire »

Professional forecasters lowered the growth, inflation and unemployment expectations for the euro area for this year and next, results of a survey by the European Central Bank showed on Friday, thus justifying the need for monetary and fiscal stimulus.

Inflation expectations for this year and next were cut to 1.2 percent, from 1.3 percent and 1.4 percent, respectively, predicted previously, the Survey of Professional Forecasters for the fourth quarter revealed.

The inflation expectation for 2021 was trimmed to 1.4 percent from 1.5 percent. The longer term inflation expectation, which refer to 2024, was retained at 1.7 percent.

The downward revisions were mainly attributed to lower oil prices, to actual inflation out-turns being lower than anticipated and to the worsened economic outlook, the ECB said.

"With regard to the ECB's September monetary policy package, SPF respondents, on average, reported that it had a small net positive impact on their inflation and growth expectations, although the precise magnitude is difficult to assess," the survey report said.

The September stimulus package of the ECB included a 10 basis point cut to the deposit rate to -0.50 percent, a restart of the asset purchase programme, significant changes to forward guidance and the launch of a tiering system for reserve remuneration, among others.

Core inflation expectation for this year was retained at 1 percent, while that for next year was lowered to 1.2 percent from 1.3 percent. The figure excludes prices of energy, food, alcohol and tobacco.

For 2021, core inflation is projected at 1.4 percent, which is lower than the 1.5 percent predicted earlier. The longer term expectation was cut to 1.6 percent from 1.7 percent.

The balance of risks remained to the downside, although less than before, the report said.

Growth forecasts for this year was lowered to 1.1 percent from 1.2 percent, in the latest survey. The outlook for next year was cut to 1 percent from 1.3 percent.

The growth projection for 2021 was cut to 1.3 percent from 1.4 percent. The longer term projection was retained at 1.4 percent.

"Respondents attributed their revisions to weak economic data and the persistence of uncertainty related to Brexit and foreign trade in general," the ECB report said.

"Some respondents mentioned that their baseline scenarios factor in some stimulus from fiscal loosening, on top of the small expected effect of the ECB's recent monetary policy measures."

In his final post-decision press conference on Thursday, ECB President Mario Draghi stressed on the need for more support from fiscal policy to help create a conducive environment for the central bank to raise interest rates in future.

The latest survey showed that the unemployment rate is forecast to ease to 7.5 percent next year from 7.6 percent this year, and drop further to 7.4 percent in 2021. That compares to 7.6 percent, 7.4 percent and 7.3 percent projected in the previous survey.

The longer term projection for unemployment rate was raised to 7.4 eprcent from 7.3 percent.


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U.S. Dollar Falls On Rate Cut Hopes

Trading 25 oct 2019 Commentaire »

The U.S. dollar traded lower against its most major counterparts in the European session on Friday, as weak existing home sales and durable goods orders data released overnight raised expectations that the Federal Reserve would cut rates next week.

The U.S. durable goods orders fell more than expected in September and shipments also declined.

U.S. new home sales pulled back in September, falling 0.7 percent to a seasonally adjusted 701,000 units.

The data supported hopes of a rate cut by the Federal Reserve for a third time this year.

Markets widely expect the Fed to reduce interest rates by a quarter-point, taking it to 1.5 percent to 1.75 percent.

On the trade front, hopes faded for a resolution to the Sino-U.S. trade dispute after U.S. Vice President Mike Pence adopted a hard line in a speech Thursday laying out President Donald Trump's China policies and reiterating U.S. support for protesters in Hong Kong.

China hit back at Pence's criticism, accusing of lying and chiding him for disregarding American problems like racism and wealth disparity.

The currency showed mixed trading against its major counterparts in the Asian session. While it was steady against the pound and the euro, it rose against the yen and the franc.

The greenback depreciated to 0.9907 against the franc, from an 8-day high of 0.9931 seen at 12:15 am ET. On the downside, 0.96 is possibly seen as the next support level for the greenback.

The greenback reversed from an early high of 108.70 against the yen, dropping to 108.55. The next possible support for the greenback is seen around the 106.00 mark.

The U.S. currency weakened to 1.1123 against the euro and held steady thereafter. At yesterday's close, the pair was worth 1.1104.

Survey data from the market research group GfK showed that German consumer confidence is set to weaken to a three-year low in November.

The forward-looking consumer sentiment index fell to 9.6 in November from revised 9.8 in October. The expected score was 9.8. signs of weakness.

The greenback eased off to 1.3058 against the loonie and 0.6834 against the aussie, from its early high of 1.3077 and an 8-day high of 0.6809, respectively. The currency is seen finding support around 1.28 against the loonie and 0.71 against the aussie.

On the other side, the greenback hit a weekly high of 0.6356 against the kiwi from yesterday's closing value of 0.6383. Next key resistance for the greenback is likely seen around the 0.62 level.

The greenback reached as high as 1.2815 against the pound, up from a low of 1.2862 it touched at 3:00 am ET. The greenback is likely to find resistance around the 1.27 mark.

The University of Michigan's consumer sentiment index for October is scheduled for release in the New York session.


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*ECB, PBoC Extend Bilateral Currency Swap For Another Three Years

Trading 25 oct 2019 Commentaire »

ECB, PBoC Extend Bilateral Currency Swap For Another Three Years


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*ECB's Vasiliauskas: Latest Policy Decision Well Timed, No Need For Big Changes

Trading 25 oct 2019 Commentaire »

ECB's Vasiliauskas: Latest Policy Decision Well Timed, No Need For Big Changes


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*ECB's Muller: Talks On New Policy Framework Should Begin In Coming Qtrs: Reuters

Trading 25 oct 2019 Commentaire »

ECB's Muller: Talks On New Policy Framework Should Begin In Coming Qtrs: Reuters


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